Q&A with industry leader Colin Dunn, Panalitix Director & Chief Innovation Officer

by Kev Ryan

 
 
 

MtR’s Kev Ryan sat down recently with Colin Dunn who was kind enough to give his thoughts and opinions on a couple of key questions.

KR – In dealing with accountants all day everyday, are you seeing much chatter amongst the 60+ year old accountants about wanting to wind back, sell & retire?

CD – Absolutely. Time creeps up quickly on everyone and the age of 60 is a definite trigger point to start thinking about retirement or selling the firm. Unfortunately, however, few firms (especially small firms) plan for this.

KR – so a lot of talk and not so much doing?

CD – In 90% of cases it is just talk; accountants bouncing ideas of others in similar situations to figure out what the options are and attempt to get an idea as to what others are doing.

KR – Are you seeing older practitioners looking to internal team for succession?

CD – I think many would like to, but I see very fewer actually engaging in discussions with younger people on their team. And when they do, the timeframe is often too late. It’s one thing for a young accountant to have partnership aspirations, but another for them to have the borrowing power to complete a large transaction. Young people’s priorities have changed. When I started my career as an accountant in 1987, partners hired graduates with a view to one day their becoming a partner. Many young accountants saw themselves progressing through the ranks and assuming the role of partner one day in the future. When I talk with young accountants nowadays, I don’t get the sense that they are driven by making partner. For the most part, they are much more driven to use their borrowing capacity to acquire property and other assets than to buy into an accounting firm.

KR – In your opinion how well planned are older practitioners generally for succession, winding back and retiring?

CD – Without meaning to generalise, I would say very poorly. Of course, some practitioners have it all planned but if you got 100 partners aged 60+ in a room and asked them to show you their documented exit plan, my guess is no more than 10% would be able to do so.

KR – If you were a young accountant today would you see any benefit in an older Practitioner merging in with you?

CD – I would see some benefits (for example, an established client base, the wisdom of the older practitioner to learn from, potentially some strong team members) and there are also some potential downsides such as an ageing client base. On balance, if I were a young accountants I would certainly be interested in taking a look at a well established firm with an impending change of ownership.

KR – What advice would you give to a 60+ year old Practitioner looking to retire within 5 years?

CD – Start planning now. Five years is a long time but it goes very quickly. Every day you invest in getting your succession or sale plan together is a day you can expect to increase the ultimate sale price.

KR – I believe the older practitioner can have an easier run to the finish line if they merge in with someone, someone that can take away all the “noise” freeing them up to do more meaningful work with their longstanding clients. This has to add value to the Merge’or’. Would you agree?

CD – Yes, I think it is a very viable option and with the right merger (this is, of course, the tricky part where practitioners need help) synergies and potential economies of scale can also boost the value of the firm pre-sale as well as the other benefits you mention.

 
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